New Home Sales up slightly in December, but median prices rose significantly (forcing more and more potential buyers out of the market!) According to data released this week, New home sales increased 1.6% month/month to a seasonally adjusted (I love the fuzzy math) annual rate of 842,000 in December (consensus came in 860,000) from a downwardly revised 829,000 in November. On a year/year basis, new home sales rose a whopping 15.2%. The key takeaway from the report is that new home sales, which are counted when contracts are signed (not closed) moderated for the 2nd straight month from the torrid recovery pace experienced in July to October (due to property chasers, and historic low rates “thank-you-FED) period that ran at an average sales pace of 968,000. I believe that the rapid rise in prices has contributed to the moderating rate of sales.
Ø The
median sales price increased 8.0% year/year to $355,900 (more than 4x the rate
of the bogus inflation numbers) while the average sales price jumped 4.6% to
$394,900.
Ø For
the full year, sales climbed to 811,000, the best level in more than a decade. However,
it does not take rocket science to comprehend the driver of the recent slowing
in sales... record median home prices rose 8.0% year/year to $355,900.
Ø 15%
of new homes sold in December cost more than $500,000, down a tad from 17%
prior month.
o
Fed-head Powell on Wednesday cited
real estate as a bright spot in the economy even as other sectors have
cooled. “The housing sector has more than fully recovered from the downturn,
supported in part by low mortgage interest rates,” he said after the latest FED “BS”
policy statement was released.
Well played another housing bubble in the making!
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